Interpreting Andrew’s Pitchfork The same rules for support and resistance apply to Andrew’s Pitchfork. The information above is for informational and entertainment purposes only and does not constitute trading advice or a solicitation to buy or sell any stock, option, future, commodity, or forex product. Past performance is not necessarily an forex andrews pitchfork technical indicator for volitility of future performance. Volatility The Volatility technical indicator is helpful in seeing potential market reversals.
Strong trends upward are marked by decreases in volatility. Strong trends downward show a general increase in volatility. As the price in silver futures was increasing, the volatility was steadily decreasing. The change in trend was characterized by increased volatility. Bottom Reversals When prices bottom, they are usually accompanied by increased volatility. An increase in the Volatility indicator after a recent decline, could signal that the price is bottoming.
A trader might exit or reduce the size of short positions during this time of increased volatility at a bottom. The theory is that a change in volatility tends to lead to a change in price. For example: Bollinger Bands are volatility indicators and if the price touches or penetrates either band, it could indicate a price reversal. However some are more important in currency trading than others. Is Social Forex Trading Here To Stay! What is a Mini Forex Account?